Putting it all together for the 2019 cropping season

Take home messages

• Knowing your yield potential at the start of the season allows growers and advisers to make decisions on which inputs are required. If there is good soil moisture, inadequate crop inputs for the 2019 crop, may result in lost opportunities to get your business back on track following the dry 2018.
• Reducing expenditure on variable costs such as crop inputs, repairs and labour without justification can be counterintuitive to getting the business out of trouble. Summer weed control and rotation management are fundamental to growing a crop (especially a cheaper one) and should not be jeopardised by budgets.
• Savings this year can certainly be made regarding reduced use of up-front fungicides and fertilisers. However, it’s important to validate and assess the risks before making the decision.

Background

For many growers in the Mallee and northern Wimmera, 2018 was one to forget – except for Collingwood losing the Grand Final! With most grain growing areas receiving less than 30% of their average growing season rainfall and a high number of frosts it was expected that many crops would yield well below average. However, there were pockets where growers and advisers were surprised with yields still achieved. With the grain prices that were experienced at harvest, those small yield gains were the difference between making a significant loss and covering costs or dare we say it ‘making a profit’! Many have attributed the profit despite a difficult season to the changes in farming systems, soil type, time of sowing, varieties, summer weed control and rotations and they would not be wrong. It is for this reason that we cannot fall into the mistake of blanket cutting all costs to recoup losses from the previous season, as certain inputs are vital to achieving relative yield potential.

Crop nutrition

This paper will focus on the most obvious of the input savings – the reduction of up-front fertiliser, mainly phosphorus (P). Phosphorus is essential for root development and is required at the very early stages of the crop’s development. It can help to counteract root diseases and in some cases herbicide residues. It also assists with tiller production, which couples with the decision on seeding rates – for example, if you reduce your seeding rates, you will require more tillers, and therefore, more fertiliser to promote tillers. Inversely, if you reduce your fertiliser rates, then you will have less tillers, and therefore, a greater need for higher seeding rates.

However, often only 30% of paddocks are responsive to applied P. To determine a paddock’s responsiveness to applied P, a soil test is recommended. This will cost approximately $30-$35/paddock or zone. By understanding the level of P in the soil, fertiliser rates can be tailored not reduced, to ensure timely application of fertiliser on a paddock in a location where it is likely to improve yield.

There are two commonly used tests; Colwell P and DGT. Often these tests are accompanied by a measure of the Phosphorus Buffering Index (PBI) which it essential to determine the P holding capacity of the soil, or in other words; the availability of the P in the soil. In terms of Colwell P, no longer does the 15ppm result act as the threshold, instead, the relationship between Colwell P and PBI is used to determine a Critical Colwell P (CCP). The CCP is determined by the following formula: CCP = 4.6 x (PBI^{^0.393}). If the Colwell P value is below the CCP then the paddock is estimated to be responsive to P application, if the value is greater than the CCP then responses are unlikely.

Example 1

Colwell P = 28ppm, PBI 150. CCP = 4.6 x (150^{^0.393}) = 33ppm. The initial Colwell P value is lower than the CCP, thus the paddock is deemed to be responsive.

These results suggest that it is possible to save significant amounts of money by tailoring fertiliser rates without compromising yields and subsequent income. Remember, by the time we see P deficiency it’s too late and we cannot correct by applying in-crop, so use the results to determine your rates.

Crop rotations

Intended crop rotations can also be ignored following a drought, with most growers reducing the area sown to higher risk crops such as canola and pulses. There is nothing wrong with this strategy, however, the benefit of break crops has been evident in recent years and the definition of a break crop doesn’t need to be limited to just canola and pulses. Fallow, pasture and hay can all provide a lower cost alternative to higher risk break crops. If soil moisture at sowing is low, then target those low-cost alternatives to higher risk (lower productive) soil types. This may allow greater investment (e.g. weed management or nutrition) into the more productive paddocks.

Crop protection

In terms of expenditure on up-front fungicides such as Intake®, Systiva® and Uniform®; consider the risks of early disease infection and how you would manage an early outbreak. Aside from favourable seasonal conditions that you cannot control, key drivers that favour early epidemics include a ‘green bridge’ and use of susceptible varieties. For most areas, there is a relatively low risk of a green bridge, so that leaves it up to varietal choice. If planning to grow a susceptible variety, important to consider whether there is an alternative option of a variety that provides a similar yield potential but with a better disease package? It is one of the easiest changes you can make, but for many there is a tendency to stick to what we know. Consequently, if the green bridge risk is low, consider delaying the up-front cost for fungicides and be prepared to reassess in-crop and spray if disease is being observed in the region.

There are some up-front seed dressings that should continue to be applied irrespective of the poor season in 2018 and these are products that control smuts and bunts in cereals and imidacloprid (Gaucho®) for the control of aphids, most notably Russian Wheat Aphid¹.

¹Current advice from aphid experts at SARDI & CESAR is that: Insecticide seed treatments, while efficacious, should be used with caution and given priority in areas of high risk of infestation of RWA in 2019.

Grain marketing

The other important factor for improving financial budgets is grain marketing. It is a very challenging, rewarding but also cruel practice. The greatest lessons I have learnt and seen, is not to be greedy but also avoid receiving the lowest price. At the beginning of the 2018/19 harvest, prices exceeded $400/t for wheat and barley. Despite this good price, some growers currently still have most of their cereal crops unsold and the price has dropped substantially. It is uncertain where this market will go or what will happen as the season progresses however, the lesson from this experience has been that despite the domestic demand being high, the grain prices don’t just keep climbing after harvest. Other factors out of our control such as the trade war between China and US and the anti-dumping complaints on barley imports into China were unpredictable and not welcome. If growers are happy with the price and the risk of downside to our budgets is greater than the rewards, then why hold off? Sell.

Conclusion

While this paper has focused on the importance of up-front inputs for your farming system, if a business is in short term trouble then the whole farm business needs to be reviewed and in most cases these issues need to be discussed with your banker and adviser(s). Spending time developing a cash flow budget will help you determine your requirements for the season and enable you to determine whether it’s necessary to discuss with your banker/adviser extending financing options.

Following a dry season, your advisers, whether they be a retail or private agronomist, accountant and/or grain marketer become of greater value to your business compared with an average or above season. Generally, they are there to improve your business, not drive it into the ground. A good adviser will help you make informed decisions rather than blanket cost savings. Peers or neighbours are also a good resource to bounce ideas off and attending events like this GRDC Grains Research Update will also assist you in getting the latest information on specific issues.

Contact details

Simon Craig
402-404 Campbell St, Swan Hill
0428 922 753
simon@agronomise.com.au
@craigyMallee